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BANK OF AMERICA, COUNTRYWIDE BEING SUED BY AIG for $10 BILLION -AUGUST 2011-NEW YORK

BANK OF AMERICA, COUNTRYWIDE BEING SUED BY AIG for $10 BILLION -AUGUST 2011-NEW YORK

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Published by 83jjmack
Insurer AIG filed on Monday a $10-billion lawsuit against Bank of America, the largest bank in the U.S.


AIG said it lost on mortgage-bond investments because it was a victim of massive fraud allegedly perpetrated by BofA, which took over the businesses of Countrywide Financial Corporation and Merrill Lynch.

The insurer claims that the bank profited from the bundling of mortgages into securities. AIG filed the complaint with the New York State Supreme Court to protect the firm and American taxpayer’s stake in the firm. AIG was bailed out by Washington by $182.3 billion.

AIG said it is not the first lawsuit the insurer had filed against counterparties that sought to profit at their expense, nor will it be the last one.

In July, former Countrywide investors filed a lawsuit against BofA after they opted out of a $624-million settlement. The investors claimed that the bank misled shareholders about its finances and lending practices.



Read more: http://www.allheadlinenews.com/articles/90056597?AIG%20files%20%2410-billion%20lawsuit%20against%20Bank%20of%20America#ixzz1UZeCDYfG
Insurer AIG filed on Monday a $10-billion lawsuit against Bank of America, the largest bank in the U.S.


AIG said it lost on mortgage-bond investments because it was a victim of massive fraud allegedly perpetrated by BofA, which took over the businesses of Countrywide Financial Corporation and Merrill Lynch.

The insurer claims that the bank profited from the bundling of mortgages into securities. AIG filed the complaint with the New York State Supreme Court to protect the firm and American taxpayer’s stake in the firm. AIG was bailed out by Washington by $182.3 billion.

AIG said it is not the first lawsuit the insurer had filed against counterparties that sought to profit at their expense, nor will it be the last one.

In July, former Countrywide investors filed a lawsuit against BofA after they opted out of a $624-million settlement. The investors claimed that the bank misled shareholders about its finances and lending practices.



Read more: http://www.allheadlinenews.com/articles/90056597?AIG%20files%20%2410-billion%20lawsuit%20against%20Bank%20of%20America#ixzz1UZeCDYfG

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Published by: 83jjmack on Aug 09, 2011
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08/12/2011

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SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK 
AMERICAN INTERNATIONAL GROUP,INC.,AIG SECURITIES LENDINGCORPORATION,
 
AMERICANGENERAL ASSURANCE COMPANY,AMERICAN GENERAL LIFE ANDACCIDENT INSURANCE COMPANY,AMERICAN GENERAL LIFEINSURANCE COMPANY, AMERICANGENERAL LIFE INSURANCECOMPANY OF DELAWARE,AMERICAN HOME ASSURANCECOMPANY, AMERICANINTERNATIONAL GROUPRETIREMENT PLAN, CHARTISPROPERTY CASUALTY COMPANY,CHARTIS SELECT INSURANCECOMPANY, CHARTIS SPECIALTYINSURANCE COMPANY, COMMERCEAND INDUSTRY INSURANCECOMPANY, FIRST SUNAMERICA LIFEINSURANCE COMPANY, LEXINGTONINSURANCE COMPANY, NATIONALUNION FIRE INSURANCE COMPANYOF PITTSBURGH, PA, NEWHAMPSHIRE INSURANCE COMPANY,SUNAMERICA ANNUITY AND LIFEASSURANCE COMPANY,SUNAMERICA LIFE INSURANCECOMPANY,THE INSURANCECOMPANY OF THE STATE OFPENNSYLVANIA, THE UNITED STATESLIFE INSURANCE COMPANY IN THECITY OF NEW YORK, THE VARIABLEANNUITY LIFE INSURANCECOMPANY, and WESTERN NATIONALLIFE INSURANCE COMPANY,
Plaintiffs,
against-
 BANK OF AMERICA CORPORATION,
Index No. ___________ COMPLAINT
 
BANC OF AMERICA SECURITIES LLC,BANK OF AMERICA, NATIONALASSOCIATION, BANC OF AMERICAFUNDING CORPORATION, BANC OFAMERICA MORTGAGE SECURITIES,INC., ASSET BACKED FUNDINGCORPORATION, NB HOLDINGSCORPORATION, MERRILL LYNCH &CO., INC., MERRILL LYNCHMORTGAGE LENDING, INC., FIRSTFRANKLIN FINANCIALCORPORATION, MERRILL LYNCHMORTGAGE CAPITAL INC., MERRILLLYNCH CREDIT CORPORATION,MERRILL LYNCH, PIERCE, FENNER &SMITH INC., MERRILL LYNCHMORTGAGE INVESTORS, INC.,COUNTRYWIDE FINANCIALCORPORATION, COUNTRYWIDECAPITAL MARKETS LLC,COUNTRYWIDE HOME LOANS, INC.,COUNTRYWIDE SECURITIESCORPORATION, CWABS, INC.,CWALT, INC., CWHEQ, INC., andCWMBS, INC., Defendants.
 
 
i
TABLE OF CONTENTSPage
 NATURE OF ACTION ...................................................................................................................2
PARTIES .......................................................................................................................................14
JURISDICTION AND VENUE ....................................................................................................26
BACKGROUND ...........................................................................................................................26
I.
THE MECHANICS OF MORTGAGE SECURITIZATION ...........................................26
II.
THE RAPID EXPANSION OF MORTGAGE SECURITIZATIONTRANSFORMS THE INDUSTRY ...................................................................................29
III.
DEFENDANTS OPERATED ON EVERY LEVEL OF THE SECURITIZATIONPROCESS ..........................................................................................................................31
ALLEGATIONS ............................................................................................................................34
IV.
DEFENDANTS’ MATERIAL MISREPRESENTATIONS .............................................34
A.
Defendants’ Offering Materials .............................................................................34
B.
Defendants’ Misrepresentations Regarding Loan Underwriting Standardsand Practices ..........................................................................................................37
C.
Defendants’ Misrepresentations Regarding Loan-to-Value and CombinedLoan-to-Value Ratios .............................................................................................40
D.
Defendants’ Misrepresentations Regarding Owner-Occupancy ............................43
E.
Defendants’ Misrepresentations Regarding Credit Ratings ...................................44
V.
DEFENDANTS’ REPRESENTATIONS TO AIG WERE FALSE ..................................45
A.
Loan-to-Value Ratios Represented by Defendants Were False .............................47
B.
Combined Loan-to-Value Ratios Represented by Defendants Were False ...........53
C.
Owner-Occupancy Levels Represented by Defendants Were False ......................55
D.
Defendants Engineered Inflated Credit Ratings ....................................................58
(1)
All Deals Have Suffered Significant Credit Rating Downgrades ..............63

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